When Michael Brodeur arrived at Bixby Energy Systems in 2006 to help the company prepare for an initial public stock offering, he found a firm in disarray.

Brodeur, a CPA who served temporarily as Bixby's chief financial officer, said he found evidence of "what I would call cooking the books" -- specifically inflated sales figures of corn stoves.

The financial records of the alternative energy company were in "abysmal" shape and Bixby was struggling to make payroll, Brodeur testified Wednesday in St. Paul at the criminal fraud trial of company founder Robert Walker.

Brodeur is the latest former executive to testify against Walker, 71, who is accused of defrauding Bixby investors by lying about the company, formerly based in Ramsey, Minn. Prosecutors say 1,800 investors lost $57 million.

Brodeur succeeded Dennis Desender as CFO. A background check soon after showed Desender had a criminal past that included bank fraud and embezzlement convictions.

As Brodeur poked around at the firm to help Bixby start preparing for a stock offering and bring in auditors, he quickly noticed that Desender still was involved with the company and still raising money. Through other background checks, he found a second executive with a criminal past, and a third, Gary Collyard, who had run into trouble with the IRS.

"It threw up a big red flag," he said of the findings. When he told Walker what the background checks had found, "(Walker) didn't seem surprised. I was a little miffed by that," Brodeur said.

As they talked about it, Walker told him: "Sometimes you have to walk through some real rough neighborhoods to get to the good neighborhood," Brodeur testified. "It was odd to me."

If convicted, Walker faces the possibility of decades in prison. Indicted in 2011, he ultimately was charged with 18 criminal counts including mail and wire fraud, conspiracy, witness tampering and tax evasion.

Desender and Collyard already have been through the justice system for their work at Bixby. Desender pleaded guilty to using deception to sell securities at Bixby and was sentenced in 2012 to eight years in prison. He's expected to testify at Walker's trial.

Collyard, formerly of Delano, Minn., pleaded guilty to fraud charges in 2012 and received a 10-year prison term.

Much of the testimony from witnesses Wednesday focused on the "finder's fees" paid to people who raised money for Bixby, with Desender at the top of the list.

By 2006, Bixby had raised $26 million, and Brodeur found a list of $3.5 million paid out in finder's fees. More than 80 percent of that had gone to Desender and a financial firm with Desender's initials.

That was a problem because in the company's private placements of stock, it had told investors that directors of the company wouldn't get commissions from raising money.

When auditors started going through company computers later in 2006, they found a spreadsheet on Desender's hard drive that listed who had received the finder's fees. One line was labeled "Bob's share," and listed $176,350. Andrew LaFrence, who at the time worked at the audit firm KPMG, testified he believed that referred to Walker. But overall documentation of the finder's fees was lacking, he testified.

And if KPMG had known about Desender's criminal past when it was first hired by Bixby for the audit work, "there's no way on God's green earth we would have done it," LaFrence said.

Previous testimony in the trial indicated that the 2006 audit was never completed, as Walker opposed it and decided to replace several members of the board of directors who wanted it performed.

The trial, now in its second week, is expected to run to the end of February or later.